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Thermoelectric (TE) materials and devices have been a promising green technology since the 1960s. Enormous research efforts bring forth TE generator and TE refrigerator, in which the former specializes in waste heat recovery while the latter advances the spot‐cooling technology. For both TE applications, the thermoelectric figure‐of‐merit zT = (s 2 σ)T/k is keen to be raised, where the Seebeck coefficient S, electrical conductivity σ and thermal conductivity κ are correlated. In complex TE materials, the stoichiometry modulation and maximal solubility of foreign atoms play vital roles. Phase diagram engineering bridges the equilibrium phase diagrams with transport properties, opening a new avenue of thermodynamic‐based optimization. This article reviews the phase diagram engineering, which tunes the TE performance for the state‐of‐art TE materials, including the bismuth‐tellurides, the zinc‐antimonides, the lead‐tellurides, and the germanium‐tellurides. Examples of I–V–VI2 and I–III–VI2 (I = Ag, Cu; III = Ga; VI2 = S, Se, Te) compounds incorporated with phase diagram engineering are also discussed. All the cases aim to validate that phase diagram engineering could be a general approach for TE materials.